Dov Monderer and Moshe Tennenholtz, Technion - Israel Institute of Technology
The theory of mechanism design in economics/game theory deals with a center who wishes to maximize an objective function which depends on a vector of information variables. The value of each variable is known only to a selfish agent, which is not controlled by the center. In order to obtain its objective the center constructs a game, in which every agent participates and reveals its information, because these actions maximize its utility. However, several crucial newissues arise when one tries to transform existing economic mechanisms into protocols to be used in computational environments. In this paper we deal with two such issues: 1. The communication structure, and 2. the representation (syntax) of the agents’ information. The existing literature on mechanism design implicitly assumes that these two features are not relevant. In particular, it assumes a communication structure in which every agent is directly connected to the center. We present new protocols that can be implemented in a large variety of communication structures, and discuss the sensitivity of these protocols to the way in which information is presented.